Reconciliation and Responsible Investment Initiative – RRII, a partnership between the National Aboriginal Trust Officers Association (NATOA) and the Shareholder Association for Research and Education (SHARE) released a report “Business and Reconciliation: An Update Exploring the Performance of Public Companies in Canada” that “suggests that corporate Canada is slow to recognize the value of tracking and reporting on Indigenous relations and reconciliation”. The report reviewed company disclosures using a broad set of indicators to measure progress in advancing reconciliation since the release of a benchmark report in 2017. Research on a sample of 78 companies found a 26 percent increase in the number of companies stating that they prioritize employment of Indigenous people, up from 13 percent in 2016. In addition, there was a 28 percent increase in companies that reference Indigenous heritage or identity in board of director diversity policies, and a 22 percent increase in senior management policies.
“However, regular and standardized reporting on company performance is still regrettably far from commonplace,” Wheatley added. The research suggests that companies are more inclined to provide qualitative, piecemeal information on their reconciliation efforts rather than year-over-year quantitative reporting, which would improve their transparency and accountability to investors and other stakeholders.
“Where we want to see greater transparency from companies is in areas like Indigenous contracting and procurement,” said Mark Sevestre, Senior Advisor and Founding Member of the National Aboriginal Trust Officers Association. “Efforts to increase business relationships with Indigenous-owned companies are critical to growing the Indigenous economy and expanding economic opportunities in our communities, yet our report finds that only 12 percent of companies are currently disclosing that information.”
The report analyzed disclosures from companies across eight sector indices: finance, healthcare, consumer discretionary, consumer staples, energy, materials, renewable energy and clean technology, and telecommunications, and found marked differences in disclosure practices between sectors. The research reviews company disclosures using a broad set of indicators in the following five themes:
- Recognition of Indigenous peoples in diversity policies and corporate leadership;
- Employment and advancement of Indigenous employees;
- Employment-related training and education;
- Commitment to upholding Indigenous rights; andCommunity investment and support and support
Recommendations:
Companies
- Adopt and report annually against reconciliation-oriented indicators such as those employed in this study
- Set targets to improve the representation of Indigenous people across your organizations including as board members, employees, business partners and suppliers;
- Solicit independent, external support to prepare and improve upon reconciliation-related disclosures and targets, such as the CCAB and the Social Awareness Group;
- Consider committing to the CCAB’s PAR program, which provides a powerful framework to enhance corporate performance in Indigenous relations and offers direct supports to build company-specific commitments that are informed by regional and sectoral considerations;
- Communicate to regulators and industry bodies the need for additional guidance and standards on reconciliation-related disclosures and best practices
Regulators
- Consider incorporating the recent CBCA amendments regarding Indigenous heritage and/or identity in provincial corporate statutes to extend diversity and disclosure rules to provincially-registered corporations
Investors
- Encourage investee companies to improve their policies, practices, and disclosure on reconciliation and Indigenous relations;
- Encourage investee companies to set meaningful targets on their performance related to reconciliation and Indigenous relations;
- Communicate to asset managers the need to incorporate reconciliation and Indigenous relations performance into investment decision-making processes;
- Communicate to data providers the need to improve data related to reconciliation and Indigenous relations.